[miningmx.com] — YOU’VE got to hand it to Brian Gilbertson: the man’s a machine. His Pallinghurst Resources lists on the JSE on Wednesday even though he said a couple of years ago that his presidency at a Russian aluminium producer would be his last job.
The question I want to ask is whether in Pallinghurst, Gilbertson is puffing on the embers of a spectacular career, or if it’s got real long-term value and purpose.
There’s risk of churlishness here, of course. Gilbertson is virtually mining royalty, a group in which you’d have to include the Oppenheimers, and other luminaries.
My first memory of Gilbertson – I was a reporter at Business Day in the Nineties – was being told of how he’d unbundled Gencor, which then seemed to me a grandly iconoclastic thing to have done. By the time of our first meeting, he was trying to merge Impala Platinum with Lonmin, another potential blockbuster.
That particular mission failed, but Gilbertson was next reversing gold assets out of Gengold and GFSA – Remgro wanted out of GFSA – to create the modern-day Gold Fields. Given that he’d finished Derek Keys’ work of dismantling Gencor, Gilbertson had pretty much helped bring the curtain down on two of the country’s biggest mining houses, and with it an entire corporate era.
Soon after, Gilbertson was off buying Shell’s Billiton which he subsequently took to London. Much criticised at first, the move was subsequently aped by Anglo American albeit to much less success. Then the merger with BHP.
So yes, you’d have to say the track record with Gilbertson is to think big – what Gary Ralfe, a former MD of De Beers, called “big, hairy’ ideas.
Which brings me back to Pallinghurst Resources.
Basically, it’s a $1bn private equity fund listed on the JSE with investments in manganese, gemstones (emeralds at this stage) and some platinum interests. It’s all pretty interesting stuff but I’d like to alert you to the platinum.
In a meeting I had earlier this week, I asked Gilbertson just how Pallinghurst Resources was going to meaningfully break into South Africa’s platinum market. It’s so tightly held and all the best pieces of land have been divvied up. Gilbertson just flatly refused to comment. “We’re not going there,’ he said.
Pallinghurst CEO, Arne Frandsen, then mentioned Gilbertson’s track record with corporate action, followed by a bit of grinning etc and you got the sense they’re up to something at Pallinghurst on the platinum front. It might be something of nothing.
Overall, however, you’d have to say Pallinghurst is pretty much a question of buying into the Gilbertson brand or myth. In essence, potential investors need to decide whether Gilbertson’s much-vaunted corporate nose is still in full working order.
That’s because the company takes stakes in businesses it doesn’t directly manage. Wasn’t this exactly the kind of structure Gilbertson helped unbundle more than a decade ago, and don’t investors start applying discounts when they detect, what in corporate-speak is often referred to as pyramids?
Gilbertson was riled at the suggestion saying his team had appointed the best professionals and I finally got a view of that chilling wrath he’s supposed to possess.
I suppose Pallinghurst won’t exactly fall into Lonmin’s trap – where the CEO distantly and erroneously I think – operates SA mines from London. But certainly Pallinghurst is a quite different kind of animal to what we’ve come to expect of the mining sector.
At least one thing, you can expect fireworks from Pallinghurst.
I’m reminded of a quote attributed to Russell Skirrow, an analyst for Merrill Lynch, who once said Gilbertson was “. like a racing car. He’d get you there very quickly but there was always a chance of a crash on the way’.
